Trade Misinvoicing: Corruption and Economic Performance in Africa

Authors

Samuel Odewunmi, Department of Economics, University of Exeter, Exeter EX4 4PU, UK.Follow
Godwin Okafor, School of Accounting, Finance, and Economics, Faculty of Business and Law, De Montfort University, The Gateway, Leicester, LE1 9BH, UK
Zheng Wang, School of Business, University of Dundee, Nethergate, Dundee, DD1 4HN, Scotland, UK
Oluwasoye Mafimisebi, School of Leadership, Management, and Marketing, Faculty of Business and Law, De Montfort University, The Gateway, Leicester, LE1 9BH, UK

Corresponding Author

Samuel Odewunmi: s.o.odewunmi@exeter.ac.uk

Authors ORCID

Samuel Odewunmi : 0000-0003-4701-1690

Document Type

Original Article

Subject Areas

African Trade

Keywords

Africa, Corruption, Economic Growth, Trade-Mispricing

Abstract

This paper analyses how trade misinvoicing, as a direct measure of corruption, affects the economic performance of Africa, given that most of the existing studies on the corruption-economy nexus are based on corruption perception index, world governance indicators, international country risk guide, and other corruption indices. Using GMM and OLS econometric techniques on a sample of 35 African countries from 2008 to 2017, our results show that corruption, as measured by value gap reduces income per capita in the selected African countries. Specifically, a 1 percent increase in the value gap will reduce GDP per capita by 0.309-0.414 percent. The results also show that trade mispricing is positively associated with tariffs. Concerning the control variables, tariffs and external debts have a negative association with national income, as expected. This result survives a robustness check of partner-country trade data sourced from UN Comtrade, a sub-sample of the value gap, and using the CPI measure of corruption. The policy recommendation of this study is to strengthen the regulatory framework for the collection of tariffs and to close any gaps in the reporting of trade data in the selected African countries.

How to Cite This Article

Odewunmi, Samuel; Okafor, Godwin; Wang, Zheng; and Mafimisebi, Oluwasoye (2025) "Trade Misinvoicing: Corruption and Economic Performance in Africa," Journal of African Trade: Vol. 12: Iss. 1, Article 8.
DOI: https://doi.org/10.59624/2214-8523.1150

Receive Date

11/08/2024

Accept Date

20/11/2025

Publication Date

2025